Here's How Much Investing $1,000 In Energy Transfer Stock One Year Ago World Be Worth Today

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 ETF Trust SPY total return over the last 12 months is 33.6%. But there is no question some big-name stocks performed better than others along the way.

Energy Transfer’s Big Run: One company that has been a great investment in the last year has been midstream oil and gas infrastructure company Energy Transfer LP ET.

Energy Transfer has been a terrible long-term investment, generating a total return loss of 19.7% over the past three years. However, improving energy market fundamentals and a major infrastructure spending bill have brought the stock back to life in the past year.

Oil and natural gas prices recently both hit multi-year highs as booming global demand recovery created energy supply shortages around the world, particularly in China. At the same time, Energy Transfer provides investors with a reliable 6.7% dividend yield, which is particularly attractive given historically low-interest rates.

Traditional oil and gas stocks have fallen out of favor with investors over the past decade as alternative energy stocks have become popular investments. Energy Transfer is focusing its recent investments on natural gas liquids (NGL), which should represent about two-thirds of the company’s spending in 2021.

The U.S. has the potential to become a major global NGL exporter in the coming years, which would potentially position Energy Transfer well for the long term.

Energy Transfer is also working on using excess free cash flow to pay down debt as part of its long-term goal to reach a leverage ratio of under 4.5x. Management recently indicated improvements in debt metrics also open the door for potential distribution or buyback hikes in 2022.

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At the beginning of 2020, Energy Transfer shares were trading at just $12.95. By the beginning of March, the stock was down to $11.20 as news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.

When the market crashed during the U.S. COVID-19 outbreak in March, Energy Transfer shares dropped as low as $3.75 during the height of the pandemic fears.

When the market bounced in late March 2020, Energy Transfer began to rebound as well. In fact, the stock made it back up to $8.23 by May 1.

Unfortunately, when the market continued its recovery in the second half of 2020, Energy Transfer shares lagged as investors grew concerned about persistently low oil and gas prices and Energy Transfer’s bloated balance sheet.

Energy Transfer In 2021, Beyond: Fortunately for investors, 2021 has been filled with positive catalysts for Energy Transfer. First, the U.S. Army Corps of Engineers and the U.S. District Court ruled the company’s disputed Dakota Access Pipeline can remain open during an ongoing environmental review. In addition, Energy Transfer has acquired Enable Midstream Partners LP ENBL for $7.2 billion, which will help boost Energy Transfer’s cash flow and expand its infrastructure footprint.

Finally, a massive winter storm in Texas in early 2021 created an opportunity for Energy Transfer, which generated an additional $2.4 billion in earnings. Energy Transfer was subsequently able to pay down extra debt and boost its full-year guidance, a bullish catalyst for the stock.

Energy Transfer investors who bought one year ago and held on have generated a nice return on their investment. In fact, $1,000 in Energy Transfer stock bought on Nov. 10, 2020, would be worth about $1,794 today, assuming reinvested dividends.

Looking Ahead: Analysts are expecting Energy Transfer’s stock to maintain its bullish momentum in the next 12 months. The average price target among the 17 analysts covering the stock is $14, suggesting a 53.6% upside from current levels.

Photo: Riccardo Annandale via Unsplash